Electricity places an important role in the modern world. Transformers are one of the key piece of equipment in modern power systems. Because of various reasons, the failure of transformers can happen unexpectedly, resulting in a power supply outage to the end-users. Distributed generation (DG) allows the bidirectional power flow in the system with higher integration of distributed renewable energy sources (RES), especially solar photovoltaics. It is possible to install the solar PV system in the range between 10% and 120% of the distribution transformer rating under the DG. Failures of distribution transformers affect the power supply to end-users and the DG integration into the distribution grid. Consistent monitoring of distribution transformers by means of physical inspection is one of the major concerns of distribution companies/end-users to prevent unexpected failure. Currently, distribution transformer parameters like state of working (i.e., online/offline) is monitored, and other parameters like oil level, oil temperatures, winding temperature, etc., are not monitored from the remote end. This chapter discusses the monitoring of health conditions of a laboratory prototype 250-VA single phase oil-immersed transformer using Internet of Things (IoT) technology to achieve the conventional distribution systems toward a smart distribution system.